Activist Investor Jana Partners Takes Nearly 9% Stake in Whole Foods

By David Benoit and Heather Haddon

Activist investor Jana Partners LLC has amassed a nearly 9% stake in Whole Foods Market Inc. and wants the upscale organic grocer to speed up its turnaround efforts while also exploring a possible sale.

Jana, Whole Foods’ second-largest shareholder, is planning to press the chain to improve its technology and operations to better compete with larger rivals, shake up its board and find out how much a potential bidder might be willing to pay, according to people familiar with the matter.

Whole Foods couldn’t immediately comment.

Jana’s campaign is the latest quandary for Whole Foods, which has struggled to make the transition from high-flying upstart with a loyal following into a large, national chain with the kind of back-office systems tracking customers and inventory that rivals use to keep costs down and sales up.

Whole Foods’ stock has risen 4% over the past 12 months, compared with a 15% gain in the S&P 500, and has lost more than half its value since peaking in 2013. Sales, meanwhile, have fallen over the past 18 months. Same-store sales — a key retailer metric — fell 2.5% during its fiscal year that ended in September 2016. The company’s market value currently stands at around $10 billion.

Jana has lined up a potential slate of board nominees, the people said, four months before the deadline to launch a board fight. That’s likely a signal that Jana, which has quietly reached settlements with several companies this year to install new directors, will be aggressive in demanding change at Whole Foods.

The activist hasn’t yet met with Whole Foods’ current board or executives, the people said.

Write to David Benoit at david.benoit@wsj.com and Heather Haddon at heather.haddon@wsj.com

Breaking the story

David Benoit and Heather Haddon were first to report Jana Partners LLC has taken a nearly 9% stake in Whole Foods Market Inc. and wants the organic grocer to speed up its turnaround efforts while also exploring a possible sale, citing sources. Jana has lined up a list of potential nominees for a Whole Foods board to launch a board fight. Jana’s plans were later outlined in a regulatory filing.

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